 Hello and welcome to CMC Markets on Tuesday the 18th of August in the weekly market update. And it's certainly been a volatile few days in financial markets. We're getting significant amount of divergence in US markets which continue to trade in the broad range that they've been in for around about the last three or four months. But we're getting some worrying weakness in German markets. We're getting worrying weakness in crude oil prices and the broader commodity space in general. And we're also going to be looking at Gold and Dolly N in the context of some of this week's key data, namely the latest FOMC minutes which I think could well be a little bit dated. But nonetheless are likely to be a key point of the markets focus this week. And US CPI numbers which are also due out on Wednesday and could well give future clues as to what the Fed might do in September. But certainly the picture with regards to US data is becoming a lot less certain and is likely to continue to be so over the next few weeks given obviously events in China, the devaluation of the Chinese remnimbee, a concern about the Chinese economy. And also the ripple effects that concerns about global growth in general are having on indices like the DAX for example which is at a very, very key level on the downside, the key support level. Going to be also looking at WTI crude prices because again that's at a very, very key level and is currently coming under a significant amount of downward pressure. And if it continues to do so I think it's going to make it that much more difficult for the US Fed to even consider hiking rates in September. And I'm going to be looking at dolly and in gold in the context of the key barriers that we have on those two products with respect to the US data that we've got out this week. We'll start with the Germany 30 now. Regular viewers of these videos will know that I've been watching this particular market for quite some months and we're approaching a very, very key support level namely the 200 day moving average. But more importantly I'm going to show you two charts here. They're both daily charts but I've drawn a few more lines on one chart than I have on the other. Now I'm going to basically show you the chart with not only the purple lines on it but the blue lines as well because there's potentially here what I would call a diamond formation. Now diamond formations generally tend to happen at market tops. Now you could categorise this potentially as a diamond formation. The only concern that I've got is that it hasn't really happened at a market top. So the jury's out as to whether or not this has the makings of a significant reversal pattern. Nonetheless the trigger point still remains pretty much the same area in the context of the break below the 50 day moving average which we saw in the middle of this month. And now the test of the 200 day moving average as we move on to the chart without the diamond on it and a very, very key support level which could well open up the July lows around about 10,700. Now what we need to see here, the oscillator as you'll notice is in oversold territory and we have flirted a little bit below the 200 day moving average but we haven't actually closed below the 200 day moving average and that's really the signal that I'm looking for to suggest that maybe we're going to see further downside in this particular market because the last time that we closed below the 200 day moving average was in early January this year. So I think it's significance in the context of the fact that we've broken a key triangle. We've seen a bit of a triangle break out to converging trend lines and we could well take out the lows in June which come in around about 10,800 and if we close below the 200 day moving average we could well get a momentum roll over towards the lows that we saw in July. If you thought I laboured the point on the DAX chart a little bit I'm going to make this one fairly simple. It's US crude oil, it's a long term monthly chart and we're at a very, very key support level. We're trading around about the lows that we saw earlier this year around about $42 a barrel. We've actually made new multi-year lows around about $41.35, $41.35. But where we close this week could be very, very important in the context of where we go to next because the reason this chart is important is because the last time we were around these sorts of levels was in 2009, 2008, 2009 and the lows in 2008 were $35 a barrel. So if we're able to close the end of this week below $42 a barrel the prospects of a move significantly lower in crude oil increase exponentially and the risk then becomes that much greater we could well ratchet lower. And if we continue to do that then the likelihood of a US rate rise becomes that much harder to argue. And I think that more than anything is going to be key in the context of the rate discussion that we're going to get over the course of the next few weeks. So we talked about the importance of the Fed minutes and in some contexts they are important. The problem is they could be a little bit stale but I think where they could come in useful is in the context of whether Atlanta Fed Dennis Lockhart has company in his belief that the bar to not raising rates has changed for any of the other members. Now the members in particular that are of particular interest are likely to be John Williams because he's a centrist like Mr. Lockhart and potentially Mr. Lacker as well. So certainly keeping an eye on those two Fed members could well be instructive in terms of the thinking around a potential decision to raise rates in September. That being said, I think the key data to watch out for this week is going to be US CPI data because this morning we saw UK CPI jump much more than expected. Now the inflation dynamics between the UK and the US aren't the same so there's probably not going to be any crossover whatsoever but certainly in the context of currency movements a strong US CPI number could push the dollar higher. So these are the key levels that really we need to keep an eye out for on Dolly N and on gold. So we'll start with this daily Dolly N chart and as you can see from the data in front of you we've been pretty much trading sideways since the highs that we saw in June at 125.80. We did trickle lower to around about 120 and a half in early July but since then we've found a significant interest to sell above 125. We posted a key reversal day earlier this month with a move down to 123.75 and that really is the key support level on the downside. And I think if we do get a particularly strong US number later this week we could get another retest of 125. I do not expect to see a move much above the highs that we've already seen. On the downside 123.75 is the key level there in the event of a poor data print but overall I expect to see further range trading between 125 and 123.75. We'll finish up with gold prices. Now I talked about gold last week and I warned about the strong resistance 11.35. That still holds true. So a poor US number later this week keep an eye on the Philadelphia Fed after this week's very poor empire manufacturing. A poor number there. We need to see a significant breakthrough 11.35. If we get a fairly positive number and not a strongly positive number but certainly not a poor number then once again we could well drift back down towards $1,110 an ounce. But overall I expect to see more range trading on gold prices. I do not expect to see a breakout of the range that we've currently been in between 10.85 on the downside and 11.30 on the top side. So all that's left for me to say is thanks very much for listening and a quick reminder about Thursday's webinar at 3pm where Colin and I will be talking about or going over the events of the last few days namely the FOMC minutes, US CPI, dissecting them, dissecting the US Philly Fed, the empire manufacturing and potentially looking ahead to next week's Jackson Hole Central Bank annual symposium. If you can't attend then I'll see you all again next week. This is Michael Houston talking to you from CMC Markets.